Red Deer city council passed a 10.35 per cent residential tax increase on Tuesday.
The increase is slightly lower than the 10.5 per cent increase narrowly approved in a split 5-4 vote during last November's budget talks because property assessments came in a little higher than estimated.
The total annual tax bill on every $100,000 of residential assessed value will increase to $989.71 in 2025, up from $896.89 in 2024.
For the owner of a typical home worth $350,000, the increase means they can expect their total tax bill – including municipal and school taxes and a small seniors foundation levy – to increase by about $325, for a total bill of $3,464 this year.
Non-residential tax rates are also going up 10.35 per cent and tax rates for multi-family properties are going up 6.49 per cent.
Mayor Ken Johnston took aim at the provincial and federal governments for their role in saddling municipalities with the burden of maintaining communities with diminishing support from Edmonton and Ottawa.
"Municipalities across this country have been treated, frankly, shabbily, by other orders of government," said Johnston.
Property taxes are the only source of revenue for municipalities, which only get nine cents of every tax dollar, he added.
That leaves municipal elected officials, who must contend with government downloading and dwindling grant support, trying to find the money to run their communities and justify their financial decisions to a tax-weary public.
"The municipalities of this province need sustainable, equitable, predictable funding, which property tax does not give."
Against this backdrop, city council made the decision for the first time in years not to dip into reserves to "soften the blow" of tax increases, he added.
"That softening of the blow has led us to this point. But I think we took a very realistic and future-forward look in the fall when we made that (tax increase) decision."
Coun. Cindy Jefferies said the tax increase was higher than any wanted but followed "pretty serious cuts" to get to an increase that provided enough money to maintain city infrastructure build reserves and "continue to do what we need to do.
"While I feel the pain that some have expressed concern about, I also appreciate we made some pretty hard decisions with courage for our community."
Despite the steep municipal tax rate increase – the biggest in more than 20 years – Red Deer's taxes are about 12 per cent lower on per capita basis than the comparator communities of Medicine Hat, Lethbridge, Calgary, Grande Prairie and Edmonton. In 2024, the municipal portion of tax bills averaged $1,811 per capita and Red Deer's per capita bill was $1,587.
Red Deer's largest tax increase came in 2003 when council passed a 13.69 per cent increase. The following year, taxes went up 11.95 per cent.
City revenue and assessment services manager Joanne Parkin offered clarification on how city taxes work in light of the misconception among some taxpayers that increases in their home values and tax increases are compounded.
Since average residential assessments increased about 10 per cent last year, some homeowners fear they would face a combined 20.35 per cent tax rate increase this year.
That is not how it works. Tax rate increases start from a revenue-neutral position, meaning the 10 per cent assessment increase is factored in. As a result, the owner of a property that increased 10 per cent, can expect to see their tax bill increase by 10.35 per cent.
If a property increased more than 10 per cent in value, their tax bill will be higher than 10.35 per cent. If the property increased less than 10 per cent in value, the tax bill increase will come in a little lower than 10.35 per cent.
Tax notices will be sent on May 12, with payments due by June 30, 2025. Property owners can sign up to receive their tax notice electronically via MyCity at RedDeer.ca/MyCityLogin by May 1, 2025. Notices will be mailed to those who do not opt for electronic delivery.
Property owners can register to pay their property tax in monthly instalments with the Tax Instalment Plan (TIP). More information is available on the city’s website, RedDeer.ca/TIP. The deadline to register is June 15.
